Yahoo Goes Ahead And Sues Facebook

Yahoo Inc (YHOO) filed the patent lawsuit on Monday in a California federal court against Facebook Inc following Facebook’s plans of an initial public offering valued at approximately $100 billion.

The lawsuit opens the first main legal fight among large social media technology companies. Tablet, smartphone and high-tech giants such as Motorola Mobility Holdings Inc., Microsoft Corp and Apple Inc. are already involved in litigation.

Yahoo was a business partner of Facebook and has significantly benefited from its relationship with Facebook. In recent years, revenues of Yahoo have been declining, whereas competitors such as Google and Facebook have progressed substantially. Yahoo has fired its chief executive Carol Bartz in September and has employed former President of PayPal, Scott Thompson for the post of chief executive.

Yahoo had demanded licensing fees last month from Facebook and has claimed that some other businesses have agreed to these types of licensing fees.

Analysts say that companies that are in the process of IPO are generally much more at risk to patent cases. In the past Yahoo has employed similar techniques. Just nine days before going public in 2004, Google issued shares to Yahoo to use its patents.

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Leo Pierson

About Leo Pierson

Former partner in a real estate management firm, Leo, has been active in the market for the last 8 years. Ex-blogger on penny stocks, now focused on long term growth stocks, Leo provides valuable market snapshots each day as part of our editorial team.

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